Step One: Open Image
Open any image that you want to use in Photoshop. Make sure that it is in RGB mode by clicking "Image", choosing "Mode", and ticking "RGB". Crop the photo if necessary.
The photo we'll be using as an example is by bubor at sxc.hu
Step Two: Duplicate the Photo
The trick to doing work with photographs is to stick with non-destructive editing as much as possible. What this means is not destroying the original photo, just in case.
To do this with our sepia frame, we're going to duplicate the photo's layer. Right-click the layer your photograph is on and choose "Duplicate Layer".
Step Three: Cut the Center Out
On your duplicated layer (make sure it's selected by clicking on it once), use your rectangle marquee tool to select the center of your photograph. Remember that anything outside the box you create with the selection tool will be the "frame" and select accordingly.
When your selection is made, hit the "Backspace" key on your keyboard to cut the center out.
Step Four: Apply Layer Styles
We're going to apply 3 quick layer styles to make the effect really tick. To get to your layer styles, go to "Layer", choose "Layer Styles", and select "Color Overlay". (In Photoshop 7-CS2, you can also click the small "f" icon at the bottom left of your layers palette and choose "Color Overlay. In CS3, the icon is in the same location but is an "fx".)
In the "Color Overlay" dialog, set the color to #6b583e and the style to "Color". Then, go to the "Stroke" tab.
Under "Stroke", set the color to white and adjust the size to between 5 and 10 pixels (use the preview to see what looks best to you). Then, go to the "Drop Shadow" tab.
In "Drop Shadow", leave all the settings alone except the distance and size. Adjust these until you get a fairly wide, but very smooth shadow flowing just inside the frame.
Step Five: Add Text (Optional)
This last step is completely optional, but definitely finishes the effect off for a nice, professional look. Use a smaller size script font in white to type the name of the photo and the name of the photographer or studio .... and you're done!
More Tutorials: 
